April 7, 2008 / 5:37 PM / 11 years ago

EU ministers give final go-ahead to GPS rival

LUXEMBOURG, April 7 (Reuters) - The European Union’s planned satellite navigation system, to rival the U.S. Global Positioning System, was given a final green light by the bloc’s transport ministers on Monday.

Ministers overcame the final stumbling block to the long-delayed project by giving the European Parliament more say in how the project is run, allowing companies now to tender for contracts worth billions of euros and putting it on track to meet its 2013 deadline.

“Today, we sent a clear signal to Europe and the whole world that we are still firmly committed to ... a high-quality satellite-navigation service by 2013,” said Slovenian Transport Minister Radovan Zerjav, whose country holds the six-month EU presidency.

The EU assembly, which is a co-decision maker on nearly 90 percent of the bloc’s policies, had sought greater powers in how the wholly EU-owned system will run and the how its 3.4 billion euro ($5.35 billion) budget is administered.

They agreed that political control of the project will be in the hands of the 27 member states and the assembly, with assistance from an informal body dubbed GIP (Galileo Interinstitutional Panel).

The executive European Commission had opposed giving the parliament too much say in the ground-breaking project.

Monday’s deal gives the European Space Agency the authority to start a tender for contracts, which it hopes to finish by the end of next year.

The deal splits the work into six main segments and distributes tasks evenly among a few prime contractors and subcontractors.

Members of the original consortium charged with building Galileo — a group that pulled out of the project this year after infighting and worries about future profitability — are expected to apply in the new tender.

They included EADS EAD.PA, France’s Thales (TCFP.PA) and Alcatel-Lucent ALUA.PA, Britain’s Inmarsat (ISA.L), Italy’s Finmeccanica SIFI.MI, Spain’s AENA and Hispasat and a German group that included Deutsche Telekom (DTEGn.DE).

When the companies pulled out, the Commission proposed using unused EU funds, mostly budgeted for farm subsidies, to plug the shortfall. (Writing by Darren Ennis in Brussels, editing by Will Waterman)

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